PRETORIA, South Africa (`) — U.S. Treasury Secretary Janet Yellen watched Ford cars and pickups being assembled at a plant in South Africa on Thursday, citing it as an example of Washington-Africa cooperation as she outlined the major push of the Biden administration began refocusing on a continent that has 1.3 billion people and a wealth of economic potential.
“The United States’ strategy towards Africa is based on the simple recognition that Africa will shape the future of the world economy,” said Yellen at the Ford plant in the Silverton suburb of the South African capital of Pretoria.
“We know that a prosperous Africa is in the interests of the United States. A thriving Africa means a large market for our goods and services. It means more investment opportunities for our companies like this Ford plant that can create jobs in Africa and customers for American companies.”
U.S. Treasury Secretary Janet Yellen, left, speaks during their meeting at the National Treasury in Pretoria, South Africa Thursday January 26, 2023 as South Africa’s Finance Minister Enoch Godongwana listens. (` Photo/Themba Hadebe)
At some point, 76-year-old Yellen got behind the wheel of one of the sparkling new cars with a broad grin and gripped the steering wheel with both hands.
Yellen is nearing the end of a three-country tour of Africa that began in Senegal on the west coast of the continent and also included Zambia. Her visit marks the beginning of the Biden administration’s efforts to rebuild ties with Africa amid China’s rapidly growing economic presence in the world’s second-largest continent and Russia’s military and diplomatic foothold in parts of it.
South Africa, Africa’s most developed economy and the lynchpin of the US plan, has deep ties with both Russia and China, and raised concerns in the White House when it announced last week that it would launch Russian and Chinese warships next month and take part in a joint naval drill with them off its east coast. Russian Foreign Minister Sergey Lavrov paid an official visit to South Africa on Monday, a day before Yellen’s landing.
Yellen has avoided mentioning naval exercises during her trip, or South Africa’s neutral stance on the war in Ukraine and its decision not to side with the West in condemning Russia. She said Russia’s invasion was to blame for exacerbating some of Africa’s problems.
“Russia’s brutal war against Ukraine has pushed up energy prices and exacerbated food insecurity,” she said.
Africa is the largest single trading area in the world by number of countries. It has a young population, an emerging middle class and is expected to be home to a quarter of the world’s population by 2050.
It also has a host of issues, and Yellen focused on one of them early Thursday when she held morning talks with South African Finance Minister Enoch Godongwana. The talks dealt in part with South Africa’s transition from its heavy reliance on coal to greener energy sources, Yellen said.
South Africa relies on coal-fired power plants to generate about 80% of its electricity. Not only are coal-fired power plants a major polluter, but they have also proven unable to meet the country’s needs. South Africa is currently mired in a power crisis, with scheduled power outages hitting businesses and homes and its 60 million people for up to 10 hours a day due to diesel shortages and outages at the state electric utility’s aging coal-fired power plants.
South Africa plans to reduce its reliance on coal to 59% of its electricity generation by 2030 and aims for zero carbon emissions by 2050. The US and other Western nations have pledged to help, pledged $8.5 billion in loans to fund South Africa’s energy transition.
“South Africa is the first country to have an Equitable Energy Transition Partnership that the United States has proudly committed to as a partner,” Yellen said. “This partnership represents South Africa’s bold first step to expand access to and reliability of electricity and create a low-carbon and climate-resilient economy.”
US Treasury Secretary Janet Yellen, top left, with South African Treasury Minister Enoch Godongwana, top right, during their bilateral meeting at the National Treasury in Pretoria, South Africa, Thursday, January 26, 2023. (` Photo/Themba Hadebe)
Yellen’s mission to boost American investment and relations comes as China overtakes the US in foreign direct investment in Africa. Africa-China trade rose to US$254 billion in 2021, up about 35%.
Yellen’s trip sparked US efforts to make up lost ground, while US Ambassador to the United Nations Linda Thomas-Greenfield is also on an Africa trip, and President Joe Biden has announced he will visit later this year wants to resign, as does Vice President Kamala Harris.
The Biden administration’s plans were largely laid out at the US-Africa leadership summit in Washington in December, when US Assistant Secretary of Commerce Don Graves said: “We’ve sort of taken our eyes off the ball (in Africa) and US investors and companies have to catch up.”
Before his meeting with Yellen on Thursday, Godongwana said the US is still one of South Africa’s most important trading partners.
“I hope this continues,” he said.
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